The interagency Development Budget Coordination Com-mittee (DBCC) hinted on Monday of “powerful boosts,” helping assure growth averaging at least 7 percent this year in terms of gross domestic product.
The Cabinet-level DBCC bared its optimism of sustained, within-target local-output growth this year no matter the sub-optimal expansion of only 5.2 percent in the first three months earlier to declare the 7-percent growth goal as too ambitious even for the Philippines and its $272-billion economic engine.
In a response to the BusinessMirror, Bangko Sentral ng Pilipinas (BSP) Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the BSP backs the DBCC’s recent decision retaining the growth target of 7 percent to 8 percent this year and next.
“We continue to be optimistic that, if we could decisively address all those factors that pulled back growth in the first quarter of 2015, including modest public spending, we have the capacity to grow at least 7 percent,” Guinigundo said.
Analysts and government economic planners alike acknowledged on Monday that the slow disbursement of public funds, in tandem with weak exports, has caused local output growth to falter and disappoint the country’s economic architects in the first quarter. Fitch Ratings, one of the three major sovereign credit watchers, tagged the government’s inability to spend as a critical weakness and expressed apprehension the sloth-like pace of disbursement of public funds for growth-boosting infrastructure will not likely be fixed in the short term due to budget bottlenecks.
Aside from an increase in government spending, Guinigundo emphasized the rollout of the much-touted but weakly pursued Public-Private Partnership (PPP) Program has a significant multiplier effect on the economy.
“The rollout of the PPP projects and its impact on employment and investment is a powerful boost to economic growth,” Guinigundo said.
“Growth will also be supported by robust liquidity and credit growth. Remittances and BPO [business- process outsourcing] revenues are expected to remain as strong
pillars of both consumption and investments,” he added.
The DBCC also acknowledged that hitting the upper range of this year’s growth goal should be a challenge unless Budget Secretary Florencio
B. Abad is able to ramp spending while, at the same time, coordinate with such other agencies as the Department of Public Works and
Highways in pushing for high-impact, growth-boosting projects and programs. The DBCC previously
said next year’s growth goal of up to 8 percent should find support in
the proposed 2016 budget requiring the disbursement of a little more than P3 trillion from this year’s budget of only P2.6 trillion.